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May 03, 2023

Answer:

Case Study 1

Question 1

Issue

To determine whether Chee Beng’s statements are condition, warranty or innominate terms. Also, whether Carol would succeed in suing Chee Beng for breach of contractual terms.

Rule

Condition is a significant term which is fundamental to the contract, breach of which will give the innocent party the right to terminate the contract and sue for damages as seen in Poussard v Spiers and Pond (1876) 1 QBD 410.

Warranty is a far less imperative term of a contract, breach of which would enable an innocent party to sue for damages but not discharge it completely.

Innominate terms are a blend of condition and warranty where the parties may have the right to discharge the contract or sue for damages, depending on the terms of the contract (McKendrick, 2014).

Application

Based on Chee Beng’s card and statement to Carol, they were simply warranties that came along with the condition that he would offer unlimited training sessions to Linda, which he does to a certain extent. He did offer 10 sessions a month and 30 sessions till June, starting from March, but had not committed anything about Linda winning every competition that she participated in. He offered training sessions as much as required and feasible for Linda for three months, helping her improve. Carol’s dissatisfaction towards Linda’s progress is nothing to do with Beng’s commitment towards the training.

Conclusion

Chee Beng’s statements were warranty. Carol would not be able to sue him for breach of contractual terms, for Beng offered several training lessons as per the contract.  

Question 2

Issue

To determine whether Carol and Chee Beng’s contract could be discharged by frustration as claimed by Beng.

Rule

Discharge by frustration is applicable when an unforeseeable event occurs which makes it impossible for one or both the parties to perform the contract as seen in Krell v Henry [1903] 2 KB 740. The essential elements for attracting the doctrine of frustration for discharging a contractual obligation is as follows (McKendrick, 2014):

  1. A supervening unforeseeable event making it impossible for the parties to carry out their contractual obligation;
  2. The parties are not at fault behind this unforeseeable event;
  3. Parties did not set a remedy for such supervening event; and
  4. It would be unfair to compel either of the parties to perform their obligation under adverse situation.

Application

The Singapore government implementing a Phase 2 Heightened Alert which restricted all kinds of physical activity and movement of people is certainly an unforeseeable supervening event, which makes it impossible for Chee Beng to come over to Carol’s house to train Linda. The restriction is not Carol or Beng’s fault and neither do they had pre-decided any probable remedy for handling this kind of supervening event. In this situation, it would not be possible for Chee Beng to offer Linda any further lesson and for that reason he even refunds $2000. Here, it would be unfair to compel Beng to leave his house and come over to carol’s place for the training sessions.

Conclusion

Therefore, the Carol and Beng’s contract could be discharged by frustration. 

Question 3

Issue

To determine the remedies and recommendation for this case.

Rule

The remedy of recission is ordered by the court when declaring that a contract needs to be terminated due to complete or partial non-performance of the contractual obligation. In certain cases, the innocent party who is at loss may seek damages due to complete or partial non-performance of the obligation (Phang & Yihan, 2021).

Application

The main remedy would be to rescind the contract based on the supervening event that made the performance of the obligation impossible. Carol could seek damages from Beng, leaving the months on which he offered the training session.

It is recommended to the parties that they should terminate their contractual obligation to each other, given the fact it is not possible for Beng to perform further. Beng is advised to refund some more amount to carol for not being able to carry put his contractual obligation for the rest six months, which is from July to December.

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